The EFSD shares its experience and challenges in tackling stabilization and development objectives in a single agenda in its second Working paper.

13 December 2019

Responding to the agreements among RFAs reached during the 3rd RFA High Level Dialog, EFSD led the research track on stabilization vs development agenda in the activities of regional financing arrangements.

Moscow, 13 December 2019. 

The EFSD published its second Working Paper “Achieving Stabilization and Development Objectives in a Single Agenda: the Experience of the Eurasian Fund for Stabilization and Development”. 

The experience of the EFSD in the last 10 years has raised important questions about the developmental role an RFA could play for low income or less-developed countries. Even though other RFAs do not have a development mandate, the EFSD’s operational model inspires the RFAs to reflect on their collaboration with global and regional development partners. This experience could be particularly appreciated by RFAs which provide support to low income or less-developed countries facing longer-term structural and institutional challenges.

The EFSD experience suggests that in the context of low-income and less developed countries the stabilization mandate of an RFA may benefit from complementing it with developmental agenda. This came from understanding that without structural and institutional transformation as well as infrastructure and human capital development economic growth in those countries is likely to be excessively volatile and less inclusive, while external vulnerability is unlikely to decrease.

Development needs of such countries are vast while their internal resources to deal with development challenges are scarce. Given that resources of traditional multilateral development banks to meet these needs and willingness of the private sector to accept long-term risks are limited, an RFA could be an important contributor to development agenda in its respective region. This is relevant both for crisis and non-crisis periods.

If a number of member-countries of an RFA is relatively small (the case of the EFSD), it is feasible for an RFA to generate internal capacity and expertise, which will be sufficient to provide targeted and effective support for both stabilization and development needs of its member states. It is also possible to streamline internal procedures and practices so to avoid conflict of interest and reach needed synergy between crises related, policy-based and infrastructure lending, and grant programs.

The paper benefited from the contribution provided by colleagues from other RFAs and institutions, including the European Stabilization Mechanism, Latin American Reserve Fund, European commission, and ASEAN+3 Macroeconomic Research Office. This collaborative exercise demonstrated the strong commitment of RFAs to continue building a substantive dialogue and to ensure an effective exchange of ideas and best practices.

The full text of the working paper is available online

To access other EFSD s publications please use this link. 

Additional Information:

The Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. The EDB's charter capital totals US $7 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan.

The Eurasian Fund for Stabilization and Development (EFSD) amounting to US$8.513 billion was established on June 9th, 2009 by the governments of the same six countries. The EFSD assists its member states in overcoming the consequences of the global financial crisis, ensuring their economic and financial stability, and fostering integration in the region. The EFSD member countries signed the Fund Management Agreement with Eurasian Development Bank giving it the role of the EFSD Resources Manager.

The EDB Media Centre:

Alexander Savelyev +7 (985) 765 23 59 (Moscow)        

Azima Sapargaliyeva +7 (777) 750 00 08 (Almaty)

Sergey Gorbachev +7 (916) 727 22 00 (Moscow)